Conformance and performance roles of bank boards: The connection between non-performing loans and non-performing directorships

Lafuente, Esteban; Vaillant, Yancy; Vendrell‐Herrero, Ferran

doi:10.1016/j.emj.2019.04.005

Cited by 20 publications

(22 citation statements)

References 47 publications

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“…This shows that the higher the rate of nonperforming loan decreases the ROAs of banks within the region. This finding is consistent with Partovi and Matousek (2019) and Lafuente et al (2019). BSZ is significant at 1% and negatively related to ROA.…”

Section: Regression Resultssupporting

confidence: 88%

Liquidity risk and bank financial performance: an application of system GMM approach

Yahaya

Mahat

M.H.

et al. 2022

JFRC

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Purpose This study aims to examine the effect of liquidity risk on deposit money banks’ (DMBs) performance in Sub-Saharan Africa. This study also tests the interaction effect of liquidity risk and nonperforming loans on the performance of DMBs’ in Sub-Saharan Africa. Design/methodology/approach This study uses a two-step system generalized method of moment to test the influence of liquidity risk on DMBs’ performance in Sub-Saharan Africa. A sample of 50 listed banks across six Sub-Saharan African countries, including Nigeria, Ghana, South Africa, Zambia, Kenya and Tanzania, were used. The bank performance proxy used are return on asset and return on equity, while net interest margin is used for robustness check. Findings The study’s findings reveal a significant and negative association between liquidity risk and bank performance. Moreover, the relationship between the nonperforming loan and bank performance is negative and significant. Furthermore, the interaction effect of liquidity risk and nonperforming loans on bank performance is found to be significantly negative for the two proxies of bank performance. The result is robust for the alternative bank performance measurements and econometric model, which adequately addresses endogeneity tendency. Originality/value To the best of the researchers’ knowledge, this is one of the earliest empirical studies that examine the effect of liquidity risk on DMBs’ performance across Sub-Saharan African countries. This study further differs from previous studies with the interaction term of liquidity risk and nonperforming loan included in the model.

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Section: Regression Resultssupporting

confidence: 88%

Liquidity risk and bank financial performance: an application of system GMM approach

Yahaya

Mahat

M.H.

et al. 2022

JFRC

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“…Therefore, an increase in the level of the NPL would result in a decrease in the banks' ROE. This confirms the result obtained by Lafuente et al (2019) and Zhang et al (2016). The DEP was significant at one percent and positively affects banks' ROE, while LON is substantial at ten percent and negatively associated with ROE of banks.…”

Section: Second Regression Resultssupporting

confidence: 89%

Bank Size and Financial Performance in Sub-Saharan Africa

Yahaya¹,

Shagari²,

Mohammed

2022

Malaysian Management Journal

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Bank size is one of the vital internal determinants of banking performance, although scholars hold contradictory views on bank size and its influence on performance. The aim is to examine the effect of bank size on quoted deposit money banks (DMBs) in the region of sub-Saharan Africa (SSA). The sample, collected over a period of nine years (2011-2019) included fifty listed commercial banks drawn from across the six sub-Saharan African countries, namely Nigeria, Ghana, South Africa, Zambia, Kenya, and Tanzania. The data were analyzed using a two-step system generalized method of moment (GMM). The finding revealed a significant and negative association between bank size and its financial performance. However, the smaller banks performed better when compared to their larger counterparts in the region. These findings seem to suggest that banks keep their capital level on the high side and minimize the rate of their non-performing loans in order to achieve more excellent banking performance within the region.

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“…Non-performing financing (NPF) is the amount of financing whose collectability category is included in the criteria for substandard financing, doubtful financing, and non-performing financing The customer's inability to pay the principal installments and the profit sharing (margin) of financing causes the collectability of financing (Lafuente et al, 2019;Partovi & Matousek, 2019). The results of this study prove that there is a negative but significant relationship path between FDR and NPF.…”

Section: Discussionmentioning

confidence: 99%

The Effect of Internal and External Factors on Non-Performing Financing at Islamic Commercial Banks in Indonesia

Nasir¹,

AR²,

Amri³

et al. 2022

JSEB

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The purpose of this study was to determine the effect of internal and external factors on non-performing financing in Islamic commercial banks and Islamic business units in Indonesia. Data is collected from publications of Bank Indonesia, the Central Statistics Agency, and the Financial Services Authority. Samples were taken from January 2010 to December 2017. Data were analyzed using Fisher’s exact test, Student's t-test, and multiple linear regression analysis. The results identify that Finance to Deposit Ratio (FDR), Capital Adequacy Ratio (CAR), inflation, and BI rate have a significant effect on non-performing financing. Based on the results, this study recommends that Islamic commercial banks and Islamic business units need to stabilize their financial ratios.

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Conformance and performance roles of bank boards: The connection between non-performing loans and non-performing directorships

Cited by 20 publications

References 47 publications

Liquidity risk and bank financial performance: an application of system GMM approach

Liquidity risk and bank financial performance: an application of system GMM approach

Bank Size and Financial Performance in Sub-Saharan Africa

The Effect of Internal and External Factors on Non-Performing Financing at Islamic Commercial Banks in Indonesia

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